Getting redundancy right

Restructuring an organisation is something you may find you need to do in order to ensure the right people are in the right place in a workplace that has grown since you put the original structure in place, or that needs to make cost savings.

Redundancies are often a consequence of this, and although in employment law, are a potentially fair reason for dismissal, they are never nice, and do come with certain pitfalls.

Ensure your reasons are fair.

You have that person who doesn’t really perform too well, and although you’ve never actually discussed this with him, making him redundant would be fair because of his performance, and would leave you free to replace him with someone better, right? Um, no. Making redundancies should be because the position is no longer required, therefore you can’t immediately replace the person made redundant. Redundancy can be because a role is no longer required, the work has diminished, or the work at a particular site has diminished.

Ensure your selection process is fair.

If, say, you have 2 people doing the same job, and now only require 1, you must select the person to be made redundant fairly, and in consultation with them. This again will rule out simply deciding it will be aforementioned “poor” performer without any further process. However it could be that objective selection criteria can be agreed, and performance can be taken into account. Other criteria could be disciplinary records, attendance (but be very careful not to penalise someone who has taken time off for pregnancy related conditions, or in connection with a condition that is likely to be considered a disability), and role-specific criteria, such as customer service, sales achieved, items made etc. Length of service is not a fair reason for redundancy and should not be considered.

Ensure you make time to consult with people, and meet with them.

We’re not going through the process in depth in this blog, however this is an important process, and if you treat it as something to fit in when you have a spare minute, it’s unlikely to go well. Take time to talk to people, and empathise with the difficult situation they’re in, however, and you are more likely to have employees who, whilst naturally not happy about the situation, are more understanding of your reasons. While we’re on the subject, be honest, as far as you can, about your business reasons for making changes, and anything you have attempted in order to mitigate the need for redundancies.

Give those leaving their entitlements.

Make sure that final payments are correct and made in a timely way, and give people the right to appeal against their redundancy. Are you in a position to offer anything else, such as outplacement support (support with CV writing, job applications etc)?

Consider those staying.

Recognise that there may be feelings of guilt, or concerns that there may be further redundancies. Reassure as far as you can without of course making promises you may not be able to keep.